Shipyard Brewing owner suckers media on benefit of TIFs

I certainly hope the editors at Maine’s second- and third-largest newspapers aren’t snickering about the Maine Sunday Telegram’s recent misstep — its publication of a front-page story about a drug addict who claimed, falsely, as we now know, to have been a Maine State Trooper. That’s because both the Lewiston Sun Journal (publisher of The Forecaster weeklies) and this newspaper got taken the week before by charlatans whose easily debunked BS has the potential to cause real harm to Portland’s taxpayers and the local economy.

I’m referring to the press conference held Nov. 16 at Shipyard Brewing Company, during which brewery owner Fred Forsley, flanked by developer Nathan Bateman and Portland Economic Development Director Greg Mitchell, announced plans for two new buildings and touted the benefits of tax-increment financing (TIF), a mechanism that allows developers to keep some or all of the additional taxes they would otherwise have to pay when construction increases the value of their property.

Sharp-eyed editors should have noticed two red flags about this “news conference,” as BDN reporter Seth Koenig described it in his blog. First of all, both buildings have already been approved by the Planning Board, so announcement of their construction is hardly news, and neither of them is getting a TIF.

So what gives? Portland taxpayers, that’s what. Property owners (and, by extension, renters) pay more taxes and rent when TIFs are given to wealthy developers who get to keep the property tax money they should otherwise be contributing to city coffers. That’s why public sentiment has increasingly become hostile toward TIFs and the fat cats who ask for them, not to mention the local politicians who hand them out.

Forsley’s phony press event was a ham-handed attempt to rehabilitate the reputation of this form of corporate welfare by rewriting history, and reporters like Koenig and The Forecaster’s David Harry (whose work also appears on the BDN’s website) were all too willing to be his stenographer.

Forsley claimed the condos and high-class office and retail space he and Bateman are building would not have been possible without two TIFs: the one Shipyard received two decades ago (which has long since expired) and the one the city gave Forsley and his old drinking buddy Drew Swenson about a decade ago to build a parking garage nearby on Fore Street.

The two buildings Forsley and Bateman unveiled will rise right next to that ugly green garage and provide parking for white-collar workers and condo owners. The Shipyard TIF’s connection to this development is a much longer stretch, but Forsley’s point seems to be that had the city not given him a handout in the ’90s, he wouldn’t be around to grace the community with these wonderful new buildings.

The garage was supposed to support Forsley and Swenson’s massive Riverwalk project, upwards of $100 million worth of condos, office and retail space planned in 2006 for vacant land along the eastern waterfront. The city sold a key parcel to Forsley and Swenson and gave them a TIF worth $5 million to build the garage and facilitate the larger endeavor.

Turns out Forsley and Swenson never had the money to build Riverwalk, or even the garage, so they turned to a big firm in Boston, Intercontinental Real Estate Corp., which financed the garage’s $20 million construction in 2007. Of course, their help didn’t come cheap. In exchange, Intercontinental was supposed to get 95 percent of Riverwalk’s assets and ownership of half the garage.

Forsley claimed he never agreed to that deal, and the protracted legal squabble that ensued is a big reason why that prime real estate along the eastern waterfront has remained a vacant blight ever since. Meanwhile, the half-empty garage has been a drain on the city budget for years due to its TIF and an agreement by which the city paid $100 every month for every unleased space inside it.

Also in 2006, Forsley asked the city for another TIF for Shipyard, this time to help fund an expansion he claimed would support 18 new jobs. (Last week, he claimed the original TIF “led to” the creation of over 900 jobs — unsubstantiated nonsense that this paper ran as fact.) If he didn’t get the tax break, Fast Freddy hinted that Shipyard might leave town. The Council said no and Shipyard stayed anyway.

Fred Forsley (right) asking the City Council for another tax break in 2006; David Geary (left) of D.L. Geary Brewing Co., whose brewery succeeded without a TIF, opposed another tax break for his competitor. photo/Chris Busby

Fred Forsley (right) asking the City Council for another tax break in 2006; David Geary (left) of D.L. Geary Brewing Co., whose brewery succeeded without a TIF, opposed another tax break for his competitor. photo/Chris Busby

In 2011, Forsley floated plans to build a convention center, hotel and culinary school around his brewery, and said he’d need another TIF for that. He didn’t get one and there’s since been no evidence he made any further effort to build any of that stuff.

Far from being a shining example of the wisdom of TIFs, Forsley is the poster boy for the damage they can do to a neighborhood and the empty promises and threats that accompany them.

Chris Busby

About Chris Busby

Chris Busby is editor and publisher of The Bollard, a monthly magazine about Portland. He writes a weekly column for the BDN.